Why Web TV Skeptic Mark Cuban Thinks Google Can Make the NFL Work on the Web
If Google ends up getting the rights to stream NFL games over the Web, could the Web handle it?
That is: Is America’s Internet infrastructure capable of letting millions of people watch the same football games, at the same time, while delivering a TV-quality picture?
Cuban, as you may recall, got into Web streaming way back in Web 1.0, and became a billionaire after he sold his Broadcast.com to Yahoo.
Fast-forward to today, and Cuban is pouring a lot of resources into conventional TV, via his HDNet/AXS TV venture. He has also been a frequent skeptic about the limits of YouTube specifically and Internet video in general.
Surprise! Cuban thinks the Web, and Google, are capable of delivering NFL games to your TV.
Less surprising is that Cuban has lots of other things to say.
Short version: Cuban says that Google would be smart to grab the NFL’s Sunday Ticket rights from DirecTV.
Here’s the long version, compiled via an email exchange today:
I think Google could do 20 million simultaneous users now at a highly compressed HD. In the next 18 months, 30 million.
But that is going to eat up a lot of resources, and it’s going to be difficult to do much quality of service.
It’s one thing to originate it and distribute it. It’s another to make sure that every peered Internet provider will get it to the home at a quality Google wants it delivered.
Then there is the “last room” problem. It’s one thing to be perfect getting it to the home. It’s another to expect that everyone’s Wi-Fi works correctly. Then there are the nuances like gamblers, and fantasy sports enthusiasts who can’t have more than a 10-second delay. I don’t think you can match TV for that right now.
I’ve always been skeptical of scaling live events, but I’m softening. Not because the technology has improved so dramatically — it hasn’t. What has changed is people’s expectation of picture quality. I think there may be enough people who will accept buffering and lesser quality. There will be screaming, but the next five years of increases in bandwidth will change that.
As far as NFL rights and what Google might do, I think they could do what I suggested to the NBA: Break out the broadcast rights by device type (less likely could be by transport network). Let traditional TV networks have any delivery on a traditional TV (just like Hulu can block TV browsers, the reverse is true as well), for less money than they are paying now, while Google buys the rights for delivery to mobile for a significant amount. The NFL ends up with more money.
I’m not suggesting that if you buy the full TV package from a traditional provider, you wont have access to their TV anywhere or mobile offerings. Rather, those consumers who need the package because they are mobile and not in their homes can buy a package designed for them.
This obviously is not specific to Sunday Ticket — it’s for the bigger picture. But all that aside, the Sunday Ticket is a great starting and testing point for Google — the NBA League Pass would be as well — simply because the number of out of market simultaneous viewers falls far below what Google can handle at HD quality.
They can do Sunday Ticket. But they have to anticipate the fallout, and negative brand impact, from fans who really, really want the best quality picture on their big screen TVs. While Google can handle the technical side of delivery, they’ll have the QOS issues I mentioned above.
So DirecTV will blow away the picture quality and continuity of picture and service that Google can offer at this point. And every football fan will thank them if they keep the rights.
One more thing that came to mind as to why Google really needs this, and why DirecTV needs to do an OTT offering: The holy grail here is not disrupting the pay tv industry, as some may think. The holy grail is the ability to have a large OTT subscriber base, to act as a platform to compete with Netflix and Hulu.
Hulu wasn’t in demand because of their programming. It was because of the millions of subscribers they have paying by the month. Aero is not interesting as a play because they are impacting over the air broadcast network retrans fees — it’s because it has the chance to build a paying subscriber base.
What can you do with a paying subscriber base? You can use it as a platform to grow a pay TV-like business.
If Google has Sunday Ticket and charges X, they then can add Youtube Premium Channels to it to create more value for subscribers and to significantly increase the perceived value of that content.
They can sign deals with some linear networks to add value. Bloomberg TV is always available. And as we saw with Viacom, for the right price they will put their content anywhere. Screw their PayTV partners!
They can go out and sign deals to compete with Netflix. How happy do you think Google is that Netflix controls the OTT subscription business ? They can acquire companies like my Magnolia Pictures to originate and license content for them.
Don’t be surprised if they buy a movie chain. Why not? Movies are digital, too. If you truly want to offer every digital entertainment experience on every size screen …